NBP reveals abroad debt of Poland at the end of 2024

At the end of the 3rd 4th of 2024, Poland's abroad debt amounted to EUR 417.07 billion, an increase of EUR 8.3 billion compared to the erstwhile quarter. Data published by the National Bank of Poland (NBP) show that Poland is facing rising abroad debt, which increased by EUR 43.1 billion compared to the 3rd 4th of 2023.

Increase in external government debt and direct investment

Government debt increased in the 3rd 4th of 2024 to EUR 118.81 billion, an increase compared to EUR 117.69 billion in the erstwhile 4th and EUR 94.74 billion in the 3rd 4th of 2023. specified a crucial increase in debt may propose an increase in government financial needs, although the reasons for this are worth looking for in the current fiscal policy and economical situation in the country.

In addition, the debt for "direct investments – debt instruments" at the end of the 3rd 4th of 2024 amounted to EUR 120.8 billion, which is besides an increase compared to EUR 119.55 billion in the erstwhile 4th and EUR 117.72 billion in the erstwhile year.

Current account deficit – €4.3 billion

At the same time, the NBP reported a negative consequence on the current account, which in the 3rd 4th of 2024 amounted to EUR 4.3 billion. Compared to the 3rd 4th of 2023, erstwhile Poland recorded a surplus of EUR 1.9 billion, this represents a crucial deterioration of the trade balance. This besides confirms the downward trend associated with rising expenditure and commodity trade problems.

"The full value of the current and capital account balance in the 3rd 4th of 2024 was negative and amounted to PLN 8.6 billion, and its GDP ratio was negative 0.9%," the NBP informs. This deterioration of the consequence compared to the 3rd 4th of 2023, erstwhile this rate was minus 0.4%, may indicate further difficulties in the Polish economy.

Main reasons for worsening the current account balance

Three factors were most affected by the deterioration of the current account:

1. Change in surplus to deficit in commodity turnover – the balance of trade in goods decreased by PLN 18.2 billion.
2. Reduction of the affirmative balance of services – the balance of services amounted to PLN 43.9 billion, but it was not adequate to compensate for the another negative balance.
3. Deepening the negative balance of primary income – PLN 39.4 billion.

All these changes resulted in a negative balance of the current account in the 3rd 4th of 2024 being PLN 18.3 billion, which represents a deterioration of PLN 26.9 billion compared to the same period of 2023.

What does this data mean for the Polish economy?

The increasing external debt and the deteriorating current account balance are signals that indicate the request for appropriate reforms and measures to improve Poland's financial situation. The increase in debt could be evidence of the expanding budgetary needs of the state, as well as the increasing dependence on external financing.

In the context of the deteriorating balance of the current account, which is the consequence not only of higher import spending but besides changes in abroad trade, action may be needed to improve the competitiveness of Polish exports and balance global trade.

The increase in the current account deficit, despite affirmative results in the service sector, points to the increasing challenges of global economical change, which may affect Poland's further improvement in the coming quarters.

Summary: Higher debt and deficit – what consequences for Poland?

The data presented by the NBP indicate the deteriorating financial situation of Poland. abroad debt is growing, both in the government sector and in direct investment. In turn, the current account deficit and its deterioration compared to the erstwhile year are signals that indicate further challenges for the Polish economy. In view of these trends, it is essential to take action to stabilise the financial balance and to improve the economical condition of the country.